Ethereum Layer 2s Could Take Revenue From the Blockchain as They Become More Competitive: Coinbase

Coinbase says that if more user activity moves to layer 2s and these blockchains need their own tokens to enable transactions, this could reduce the staking yields to Ethereum validators , cutting their revenue. That could reduce staking on the platform and increase the amount of ether (ETH) circulating, potentially damaging the cryptocurrency’s price. A decline in validators could also have a negative impact on the overall security of the network, the report said.

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